Covering Disruptive Technology Powering Business in The Digital Age

Deloitte has launched a new report that finds that micro multinational companies (micro-MNCs) in Asia Pacific (APAC) are increasingly adopting digital technologies and investing more in branding as they remain optimistic about cross-border e-commerce and digital trade.

The report “Going-Global: Seizing the Next Great Opportunity in Digital Trade”, conducted in collaboration with WorldFirst, reveals that APAC has maintained its status as a key driver of global economic growth amidst global economic slowdowns, geopolitical tensions, and rising protectionism. Specifically, the region’s import and export trade in goods accounted for approximately 40% of global trade activities, reaching nearly USD18 trillion — a 30% increase from the USD13.7 trillion in 2013.  WorldFirst is a one-stop digital payment and financial services platform for global businesses, especially SMEs in international trade.

71% of the surveyed micro-MNCs — enterprises engaged in cross-border e-commerce and digital trade — remain optimistic about the prospects of cross-border e-commerce over the coming year. This indicates that most companies are confident in market demand, policy environment, and technological advancements, anticipating continued market expansion with significant growth in sales and profits.

Meanwhile, 88% of companies surveyed recognized that branding is crucial in sustaining long-term business growth. Branding not only helps businesses establish a differentiated competitive advantage in the market, but also enhances customer loyalty and market share. As a result, 68% of the businesses said they will increase investment in branding.

The report also found that policy initiatives introduced in Singapore have significantly reduced the challenges both merchants and consumers face in digital transactions. Such initiatives include the enhanced QR code payment scheme SGQR+, as well as the launch of the world’s first cross-border linkage of real- time payment systems, connecting PayNow with Thailand’s PromptPay and Malaysia’s DuitNow. These initiatives have led to more merchants adopting digital payment methods which provides more convenience for consumers – thereby bolstering digital trade growth.

As a mature market, Singapore’s position as a global commercial centre and an international logistics hub provides a firm the foundation for businesses to conduct digital trade. The country is consistently ranking at the top in global business environment indices. Singapore has also actively participated in the construction of the digital trade system and reduces digital trade barriers through extensive trade partnerships.  Although Singapore’s domestic e-commerce market is not large, its advantages in trade, transportation, and digital infrastructure endow it with a pivotal role in Southeast Asia’s digital trade.

Enterprise Singapore found that there was a 66% increase in Singapore companies venturing into new markets for the first time in 2023, compared with 2019. This refers to companies that went overseas for the first time, or those that already have overseas operations but set up shop in a new market.

Cross-border businesses look for comprehensive platform for payment and financial services

The Deloitte-WorldFirst report finds that more micro-MNCs have begun to run multiple business lines, on more than one e-commerce marketplaces, and set up local operations in overseas markets — a shift partly due to more fierce competition in cross-border e-commerce. This trend has led cross-border businesses to seek integrated payment and financial services providers.

Consequently, the cross-border trade payment firms, including WorldFirst, have transitioned to a one-stop comprehensive platform that offers payment as well as trade financing and other financial services. They have also integrated upstream and downstream supply chain services, such as logistics, taxation, and advertising, to support the various business scenarios of these merchants.

“WorldFirst is proud to collaborate with Deloitte to explore the opportunities and challenges confronting today’s micro-MNCs. This report’s findings are designed to better support SMEs across the APAC region in leveraging the significant potential of cross-border digital trade,” said Clara Shi, CEO of WorldFirst.

Key global findings from Going Global: Seizing the Next Great Opportunity in Digital Trade include:

• Big data analytics will lead the application of digital technologies among micro-MNCs. Big data analytics (75%) is currently the most prominent and widely applied technology, followed by artificial intelligence (AI) (47%), as these technologies are directly related to business optimisation and the enhancement of customer experience. Meanwhile, technology application in payment and settlement (20%) and risk management (18%) demonstrates the importance enterprises place on security and stability.
• Digital trade in APAC is experiencing significant growth. From 2017 to 2022, APAC’s annual growth rate in digitally deliverable services exports was 10.3%, outpacing the global average of 7.1%. Leading export markets within the region include China, Japan, Singapore, and Australia, while the European Union (EU) and North America stand out as the region’s primary external trading partners, accounting for 27% and 20% of APAC’s export market, respectively.

The Deloitte-WorldFirst report developed a new index to assess the digital trade environment and growth prospects for each country.

• High Potential Markets: Indonesia, Malaysia, Vietnam, Thailand, and the Philippines
• Mature Markets: Singapore, Japan, and South Korea
• Early-Stage Markets: Cambodia, Myanmar, and Laos
• Budding Market: Brunei

The Deloitte research surveyed approximately 300 cross-border SMEs, typically with fewer than 500 employees and primarily based in East and Southeast Asia.

“Digital trade enterprises are leveraging leading-edge digital technologies such as big data analytics, AI, IoT, and cloud computing to forge innovative business models and value chains, enriching the global marketplace with a broader spectrum of goods and services,” says Cheng Zhong, managing partner of Technology, Media and Telecommunications Industry, Deloitte China. “Moreover, digital platforms—represented by cross-border e-commerce, are transcending space and time, fostering seamless collaboration across the global value chain.”

Echoing this sentiment, Lydia Chen, Deloitte China Research partner, adds, “The vast majority of SMEs are making a pivotal shift into cross-border e-commerce, leveraging platform enterprises, their expansive international service ecosystems, and digital technologies.”

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